PetroTal Announces Q2 2024
Operations and Corporate Updates
Q2 production average of
18,290
bopd
Exit June 2024 with total cash
of $96 million
Well 19H achieves initial production
rates over 8,500 bopd
PetroTal has now produced over 20
million barrels of oil since inception
Calgary, AB and
Houston, TX - July 11,
2024-PetroTal Corp. ("PetroTal" or the "Company") (TSX: TAL, AIM: PTAL and
OTCQX: PTALF) is pleased to announce the following operational,
financial and corporate updates. All amounts are in US dollars
unless stated otherwise.
Q2 2024
Production
PetroTal achieved an average production of
18,290 barrels of oil per day ("bopd") in
Q2 2024, which included a brief river blockade during the
quarter. June's average production was 20,555 bopd.
Drilling and
Production Update
Wells 18H and 19H were successfully completed in
early May and June 2024, respectively, and the Company
commenced drilling well 5WD on June 17,
2024.
Well 18H is currently performing
within expectations with initial 7-day and 30-day production rates
of 4,621 bopd and 3,929 bopd, respectively. The well cost
approximately $17.3 million and its
investment payback is expected to be around six
months at current oil prices.
Well 19H, the Company's
20th oil producing well, commenced drilling on
May 9, 2024, and production on June 14,
2024. Subsequent to clean up, well 19H
achieved strong 7-day production rates of 8,511 bopd. Given
its structural location, the 19H well was completed with a shorter
600-meter horizontal section. It was also drilled and completed
well below budget at a cost of approximately $11.5 million. The
well's investment payback is expected in less than two months at
current oil prices.
The 5WD will be the Company's 4th formation water
disposal well allowing for water injection capacity to increase to
approximately 170,000 barrels of water per
day by year-end; facilitating the Company's
ability to produce over 20,000 bopd on a recurring basis. The
5WD has an approximate cost of $12.5 million.
As announced on May 7, 2024, PetroTal is accelerating
an additional well (20H) into its 2024 drilling program.
Drilling will commence in late July for an approximate cost of $15.0 million.
Production Milestone
Achieved
During the first week of July, the Company achieved
total production of 20 million barrels of oil since PetroTal's
first production in June 2018. This significant milestone was
accomplished in six and half years and is a result of hard work and
dedication to continuous improvement. Bretana's proved and probable
("2P") oil reserves have more than tripled, bringing the field's
estimated ultimate recovery to around 120 million barrels of oil.
While the field's current 2P well inventory is more than halfway
completed, it still has nearly 100 million barrels of oil to be
recovered.
Ecuador Export
Pilot
PetroTal has achieved a significant milestone,
securing all regulatory approvals for the Oleoducto de Crudos
Pesados ("OCP") pipeline in Ecuador. Oil loading into barges
will commence shortly for the previously announced 100,000 barrel
pilot program. This pilot allows for a comprehensive
evaluation of the transportation route, and with collaboration with
Ecuadorian partners, the Company will pursue long-term route
optimization for efficient and cost-effective oil
transportation.
Social
Update
PetroTal is pleased to announce that, on May 9, 2024,
the Company transferred $12.6 million to the Social Trust Fund's
operating bank account, representing a significant milestone since
the creation of the social trust fund concept in late 2021.
The funds have been held by the Company as restricted cash while
the fund's administrative and governance aspects were
formalized. The Social Trust's board of directors, consisting
of community representatives, the Puinahua district municipality,
and Perupetro, have agreed on the first set of initiatives to be
financed with contributions from the fund, some of which are listed
below:
1) Establish internet connectivity to over
7,000 inhabitants in the Puinahua district;
2) Provide scholarships to 100 Puinahua
students for post-secondary education;
3) Create of an external technical team that
will support the elaboration, implementation, and follow up of
projects to be financed by the Social Trust; and,
4) Install solar energy pods for clean power
access, through coordination with the Minister of Energy and Mines,
in 17 communities that are part of PetroTal's area of
influence.
Cash and Liquidity
Update
PetroTal exited Q2 2024 in a strong
position with approximately $84 million of unrestricted cash and
$12 million of restricted cash for a total of $96 million, as
at June 30, 2024. Restricted cash includes amounts
reserved for the social trust funds to be deposited at a later
date. During Q2 2024, the Company purchased 1.2 million
shares at an average price of US$0.61/share
pursuant to the share buyback program, and
paid dividends of $13.7 million (US$0.015/share)
on June 14, 2024, related to Q1 2024 operations. At the end
of Q2 2024, accounts receivable and accounts payable of
approximately $113 million and $69 million respectively, were
outstanding.
Q2 2024 results
webcast link for August 8, 2024
PetroTal will host a webcast for its
Q2 2024 results on August 8, 2024 at 9am CT (Houston), 3pm BST
(London). Please see the link below to register.
https://stream.brrmedia.co.uk/broadcast/666ae961ee30aaf32018b5c3
ABOUT
PETROTAL
PetroTal is a publicly traded,
tri‐quoted (TSX: TAL, AIM: PTAL and OTCQX: PTALF) oil
and gas development and production Company domiciled in Calgary,
Alberta, focused on the development of oil assets in Peru.
PetroTal's flagship asset is its 100% working interest in Bretana
oil field in Peru's Block 95 where oil production was initiated in
June 2018. In early 2022, PetroTal became the largest crude
oil producer in Peru. The Company's management team has
significant experience in developing and exploring for oil in Peru
and is led by a Board of Directors that is focused on safely and
cost effectively developing the Bretana oil field. It is actively
building new initiatives to champion community sensitive energy
production, benefiting all stakeholders.
For further information, please see the Company's
website at www.petrotal-corp.com,
the Company's filed documents at www.sedarplus.ca,
or below:
Camilo McAllister
Executive Vice President and Chief
Financial Officer
Cmcallister@PetroTal-Corp.com
T: (713) 253-4997
Manolo Zuniga
President and Chief Executive
Officer
Mzuniga@PetroTal-Corp.com: (713)
609-9101
PetroTal Investor
Relations
InvestorRelations@PetroTal-Corp.com
Celicourt Communications
Mark Antelme / Jimmy Lea
petrotal@celicourt.uk
T : 44 (0) 20 7770 6424
Strand Hanson Limited (Nominated
& Financial Adviser)
Ritchie Balmer / James Spinney /
Robert Collins
T: 44 (0) 207 409 3494
Stifel Nicolaus Europe Limited (Joint
Broker)
Callum Stewart / Simon Mensley /
Ashton Clanfield
T: +44 (0) 20 7710 7600
Peel Hunt LLP (Joint
Broker)
Richard
Crichton / David McKeown / Georgia Langoulant
T: +44 (0) 20 7418
8900
READER ADVISORIES
FORWARD-LOOKING STATEMENTS: This
press release contains certain statements that may be deemed to be
forward-looking statements. Such statements relate to possible
future events, including, but not limited to: oil production levels
and production capacity; PetroTal's 2024 program for
drilling,
completions and other activities; plans and expectations with
respect to the OCP and Ecuador export pilot (including the
expectation that pilot oil will travel approximately 1,000 km by
barge to Block 19); and PetroTal's expectations with respect to
projects and key initiatives to be financed with contributions from
the Social Trust Fund. All statements other than
statements of historical fact may be forward-looking statements.
Forward-looking statements are often, but not always, identified by
the use of words such as "anticipate", "believe", "expect", "plan",
"estimate", "potential", "will", "should", "continue", "may",
"objective", "intend" and similar expressions. The forward-looking
statements provided in this press release are based on management's
current belief, based on currently available information, as to the
outcome and timing of future events.
The
forward-looking statements are based on certain key expectations
and assumptions made by the Company, including, but not limited to,
expectations and assumptions concerning the ability of existing
infrastructure to deliver production and the anticipated capital
expenditures associated therewith, the ability to obtain and
maintain necessary permits and licenses, the ability of government
groups to effectively achieve objectives in respect of reducing
social conflict and collaborating towards continued investment in
the energy sector, reservoir characteristics, recovery factor,
exploration upside, prevailing commodity prices and the actual
prices received for PetroTal's products, including pursuant to
hedging arrangements, the availability and performance of drilling
rigs, facilities, pipelines, other oilfield services and skilled
labour, royalty regimes and exchange rates, the impact of inflation
on costs, the application of regulatory and licensing requirements,
the accuracy of PetroTal's geological interpretation of its
drilling and land opportunities, current legislation, receipt of
required regulatory approval, the success of future drilling and
development activities, the performance of new wells, future river
water levels, the Company's growth strategy, general economic
conditions and availability of required equipment and
services. PetroTal cautions that
forward-looking statements relating to PetroTal are subject to all
of the risks, uncertainties and other factors, which may cause the
actual results, performance, capital expenditures or achievements
of the Company to differ materially from anticipated future
results, performance, capital expenditures or achievement expressed
or implied by such forward-looking statements. Factors that
could cause actual results to differ materially from those set
forth in the forward-looking statements include, but are not
limited to, risks associated with the oil
and gas industry in
general (e.g., operational risks in development, exploration and
production; delays or changes in plans with respect to exploration
or development projects or capital expenditures; the uncertainty of
reserve estimates; the uncertainty of estimates and projections
relating to production, costs and expenses; and health, safety and
environmental risks),
business performance, legal and legislative
developments including changes in tax laws and legislation
affecting the oil and gas industry and
uncertainties resulting from potential delays or changes in plans
with respect to exploration or development projects or capital
expenditures, credit ratings and risks, fluctuations in
interest rates and currency values, changes in the financial
landscape both domestically and abroad, including volatility in the
stock market and financial system, wars (including Russia's war in
Ukraine and the Israeli-Hamas conflict),
regulatory developments, commodity price volatility, price
differentials and the actual prices received for products, exchange
rate fluctuations, legal, political and economic instability in
Peru, access to transportation routes and markets for the Company's
production, changes in legislation
affecting the oil and gas industry, changes in the financial
landscape both domestically and abroad (including volatility in the
stock market and financial system) and the occurrence of
weather-related and other natural catastrophes. Readers are
cautioned that the foregoing list of factors is not exhaustive.
Please refer to the annual information form for the year ended
December 31, 2023 and the management's discussion and analysis for
the three months ended March 31, 2024 for additional risk factors
relating to PetroTal, which can be accessed either on PetroTal's
website at www.petrotal-corp.com
or under the Company's profile on
www.sedarplus.ca.
The forward-looking statements contained in this press release are
made as of the date hereof and the Company undertakes no obligation
to update publicly or revise any forward-looking statements or
information, whether as a result of new information, future events
or otherwise, unless so required by applicable securities
laws.
OIL REFERENCES: All references to "oil" or "crude oil"
production, revenue or sales in this press release mean "heavy
crude oil" as defined in National Instrument 51-101 - Standards of
Disclosure for Oil and Gas Activities ("NI
51-101").
SHORT TERM RESULTS: References in this press release to peak
rates, initial production rates, current production
rates, 30-day production rates and other short-term production rates
are useful in confirming the presence of hydrocarbons, however such
rates are not determinative of the rates at which such wells will
commence production and decline thereafter and are not indicative
of long-term performance or of ultimate recovery. While
encouraging, readers are cautioned not to place reliance on such
rates in calculating the aggregate production of PetroTal. The
Company cautions that such results should be considered to be
preliminary.
FOFI DISCLOSURE: This press release contains future-oriented
financial information and financial outlook information
(collectively, "FOFI") about PetroTal's prospective results of
operations and production results, 2024 drilling program and
budget, well investment payback, cash position, liquidity and
components thereof, all of which are subject to the same
assumptions, risk factors, limitations and qualifications as set
forth in the above paragraphs. FOFI contained in this press release
was approved by management as of the date of this press release and
was included for the purpose of providing further information about
PetroTal's anticipated future business operations. PetroTal and its
management believe that FOFI has been prepared on a reasonable
basis, reflecting management's best estimates and judgments, and
represent, to the best of management's knowledge and opinion, the
Company's expected course of action. However, because this
information is highly subjective, it should not be relied on as
necessarily indicative of future results. PetroTal disclaims any
intention or obligation to update or revise any FOFI contained in
this press release, whether as a result of new information, future
events or otherwise, unless required pursuant to applicable law.
Readers are cautioned that the FOFI contained in this press release
should not be used for purposes other than for which it is
disclosed herein. All FOFI contained in this press release complies
with the requirements of Canadian securities legislation, including
NI 51-101. Changes in forecast commodity prices, differences in the
timing of capital expenditures, and variances in average production
estimates can have a significant impact on the key performance
measures included in PetroTal's guidance. The Company's actual
results may differ materially from these
estimates.